Affordable Housing’s Secret: Why Manufactured Homes Could Reshape Real Estate Investing

Andrew Cramer (00:00)

I would just say the most important thing, the biggest call to action for me is just look at this product, look at manufactured housing in a little bit of a different light. And don’t look at it from that, I guess it’s a trailer, maybe I’ll go look. Really just, go on the Cavco or the Clayton Homes website.

look at some of these new technologies that are being put out, and you’ll really start to see that these are pretty interesting products.

Scott Bursey (01:54)

Welcome back to the Real Estate Pros Podcast powered by Investor Fuel. I’m your host, Scott Bursey Glad you’re with us. Today we’re thrilled to be joined by Andrew Cramer who leads Bridgeview Asset Management, a specialized real estate firm.

Driving innovation in manufactured housing across the greater Pacific Northwest. Andrew is deeply passionate about leveraging cutting edge manufactured housing technologies to solve one of the biggest challenges in real estate today, delivering truly affordable housing at scale. In this episode, listeners, you can expect an insider look into off-site construction tech, scaling community portfolios, and

where the future of affordable real estate is heading. Andrew, welcome to the show.

Andrew Cramer (02:40)

Thank you, Scott. Thanks for having me. Pleasure to be here.

Scott Bursey (02:43)

It’s awesome having you here and to help our listeners get up to speed, please give us the ninety second highlight reel of how your career acned and where you’re pouring your fuel now.

Andrew Cramer (02:54)

Excellent. Thank you. Yeah. So I we got started in manufactured housing about fifteen years ago. getting into the I was starting out in the Pacific Northwest. I saw a need. This going back into kind of like coming out of that two thousand eight recession.

It was an interesting time, I suppose, in the real estate market. manufactured housing, I the my first experience was I rented a house with some friends and it would it turned out to be a mobile home. And I was terrified like most of us are when we don’t understand what a manufactured home is. And we stayed there for the weekend, had a great trip. And from then on out, I just started thinking about it differently. And I thought, why did why do we have these perceptions about this?

and that really led me to doing what I do today and getting into the investment side and doing a lot of parks in the greater northwest. And we’ve done about forty different mobile manufactured home parks since we started.

Scott Bursey (03:38)

Thank you for highlighting that background, Andrew. I appreciate you laying out that journey for us. And what really caught my attention about you was the way you’ve been able to pioneer institutional grade management in manufactured housing while staying relentlessly focused on cutting edge tech advancements in the Pacific Northwest. And taking that a step further.

Interested to know what core operational strength allows Bridgeview Asset Management to maintain a dominant edge in the specialized manufactured housing market?

Andrew Cramer (04:11)

our biggest asset is just our willingness to get in and solve these problems. my one of the greatest things I’ve learned is even very, complicated and difficult looking properties at the front end can really be broken down into just discrete solvable problems. And you’ll see some of the parks we buy are really scary, quite frankly. There’s a lot of debris and trash and homes that look really horrible. You might think there’s a lot of crime going on. Sometimes there is,

if you’re able to just pick one problem and solve it and move forward, it I’ve never it never ceases to amaze me how quickly you can turn something like that around. So it’s just a matter of, really just being willing to do that and understanding that process. understanding that, a bunch of trash and what really scary looking property can be solved with a mini excavator and some dumpsters. as opposed to trying to back away and maybe try and hire somebody to handle that for you, we’re really we are willing to step in.

and do the work. And so it’s not really complicated, to be honest with you. It’s just a matter of kind of being able to just take that framework, deconstruct what looks like an impossible problem, and just make advancements a little bit at a time.

Scott Bursey (05:12)

Wanting to understand a little bit more on what is the biggest internal friction point or weaknesses in traditional manufactured housing communities you face when trying to integrate new technologies?

Andrew Cramer (05:26)

I think the your average park is, at least forty years old. most of the homes are gonna be in that same vintage. the residents tend to be older. I would say the larger companies,

The Claytons and Cavco of the world, I think, have done a tremendous job in really creating a product that’s no longer looks cheap. there’s the HUD standard and the IBC, but they’re they are different, but they’re functionally equivalent in terms of safety, structural everything. the challenge is educating people that this is not the stigma that existed before HUD. So we’re going back to

Before nineteen seventy-six, that stigma is not valid and hasn’t been for a long time, and yet it still sort of proliferates and exists. and that stigma is really damaging. And I think a young person, particularly in the high cost of living areas, if they’re gonna be sort of socially scared of manufactured housing and they’ll say, Well,

I could maybe buy a manufactured home and start paying off a mortgage and start building equity for my life. But if they hear the stigma of, it’s trailer trash, it’s a mobile home, it’s a wobbly box, whatever, they’re not going to do that. And that actually hurts that person because now they’re just going go into an apartment where they’re not going to have those opportunities. a huge part of our business is just education about finding someone in a market who’s looking for that two-bedroom apartment and saying,

This is actually better for you. This is going to be a better home for you. And if you stay here for five years, you’ll have paid off a mortgage, not just paid rent. So there’s a lot of technological advancements I would say are great, but there’s a educational and stigma deconstruction that needs to happen alongside it for those investments to really, take hold.

Scott Bursey (06:56)

Appreciate that honest assessment and eager to explore. Where do you see the greatest untapped opportunity for new manufactured housing technologies to slash development cost and accelerate affordable housing over the next three to five years?

Andrew Cramer (07:12)

as a general rule to bring a new manufactured home onto a site is gonna there’s gonna be substantial cost savings. we can sort of unlock density, we like to call it. So there’s a property that might be 50 units, and then we find old utility connections and we’ll go, we’ll look at historical photographs and records, we’ll go to the county and present that and say, Hey, we have 10 spaces here. So

The technological side of that is oftentimes those spaces are, as you can imagine, sort of weird. They’re small, they’re configured in a funny way. So efficient manufactured homes often take the form of really small units. We’ve built homes using just containers. we we’ve done a lot working with different builders to develop homes really to conform to the spaces that we’re seeing in these properties. So I think unlike conventional stick frame housing,

You can really develop manufactured products in a very cost-effective way. that’s where there’s really, great efficiencies because you can take what’s already there in the form of these, this unlocked density, and then you can develop something new and really exciting and cool in the form of a semi-custom manufactured structure that can sit there, still adhere to the HUD code, or sometimes adhere to the RVIA, which is a which is an RV standard. but you can so you can build a perfectly safe.

home in a manner that allows you to kind of take advantage of all those things. So that’s sort of where, unlike a new construction product or a new product type that’s going to still have to go through the same plan review, the same foundation plans, the same framing plans, which don’t get me wrong, new construction technology is great. I do think that what’s unique in manufactured structures is you’re you can encapsulate that.

into its own separate code in the form, like I said, of like a HUD label or an RVIA or label. And now you just get to place that fully inspected unit onto in our case, very, effectively delivered lots on a park we already owned. So that’s one side. I do think, we have built new manufactured home parks as well. there’s definitely challenges there. And that’s largely a regulatory issue because you’re still at the end of the day

If you’re going to build a new manufactured home park, it’s the exact same thing as building a subdivision. when you ask about the next three to five years, I think that’s less of that timeline. But I would say in the next 10 years, developing a streamlined approval process for manufactured home properties, I think that would be tremendous there’s a little bit of headway in certain places. but I think that’s kind of that’s more like a 10-year.

Than a three to five year.

Scott Bursey (09:30)

And let’s expand just a little bit on that regulatory hurdle. Interested to hear what external threat or hurdle in the Pacific Northwest poses the highest risk to expanding manufactured home communities today?

Andrew Cramer (10:32)

I really try and not jump on the bandwagon of just accusing the government of slowing down everything. when you look at things like rent regulation, when you look at things like the regulatory environment that exists around construction in general, the investment community, the private real estate community doesn’t really do a great job of self

regulation and so that’s kind of why we’ve had this it took 75 years for us to get to where we are now in terms of modern construction and housing regulations. when we’re talking about manufactured housing, the biggest challenge again that I go back to is that stigma because most people are gonna think about that when I say manufactured home, they think, mobile home trailer.

They it the there’s an immediate assignment of just poor quality. and I think that is an education step of just saying, hey, go take a look at one. Go like go to a manufactured home factory, take a tour, or better just go to a dealer lot and walk in one of those homes. And I think the more people that do that, the more that perception starts to shift. I actually believe that everything’s gonna follow that. If you have enough people city council meetings.

And saying, why isn’t this part of our development plan? mayor and city councillors, why aren’t we doing this? Because this is a great way for my kids to own a home. Why can’t I set one of these homes on my five-acre lot and let my kid live there and start paying off a loan on this home? the regulatory side is actually making advancements that I think are great. There’s title, there’s something called Title One, which is an FHA product designed for manufactured homes. You can have full 30-year mortgage.

for a manufactured structure on rented land. That’s tremendous. The problem is there’s only maybe, I think, two brokers in the country that are even underwriting those loans because there’s just not really demand. So that’s a situation where the government took the first step and we as the private market just haven’t received it yet. talking about the one most important thing I think, there’s lots of regulatory problems. Don’t get me wrong, but I think

Unlocking and deconstructing that stigma a little bit at a time is gonna allow these things like FHA Title I to start to really take off.

Scott Bursey (12:28)

Looking at all these industry dynamics, what fundamental pivot must real estate operators make today to successfully capitalize on technology driven manufactured housing in your view, Andrew?

Andrew Cramer (12:41)

I think the short-term manufactured housing needs to have a long-term view. there’s been a lot of sort of quick, turnarounds where someone’s buying a park, increasing the rents, and selling it, and yielding a tremendous return for their investors. there’s a notion that

you manufacturing home tenants aren’t gonna leave. They’re the turnover is lower because they own their home. And there’s sort of unfortunately a lot of negative publicity around that, hey, they’re stuck, they don’t own the land, they’re stuck there. which can be true. you need to adopt a long, a longer term view on these properties. And you need to

look at community investment. Bridgeview’s entire path, which is let’s take something that a bank won’t look at, that a life insurance company would never look at, that an agency lender would never look at, and let’s turn it into that. And how do you do that?

You make that community better. You pave the roads, you put a playground in, you add locking mailboxes, you add community centers. Now, none of that from an investor standpoint is going to generate a return directly, right? You’re not adding any units. We do that, but I’m saying these community improvements, you can actually generate substantial value for your investors by making that community better because you’re opening the door to better lending. You’re opening the door to a wider group of prospective buyers and owners.

if you’re able to take that type of view, I’m not saying you need to hold it for 20 years. There’s just if you look at these communities not as, okay, the rents are $500 today and we need to get them to 700, how do we do that? Rents can go up, but I found an amazing amount of our tenants couldn’t be happier about paying higher rents because of the services they’re getting. if you’re an older resident and manufactured home park, locking mailboxes.

are transformative because you get your medication in the mail, you might get your social security check in the mail, those things get stolen. So modest investments can transform tenant experience to the point that they’re so they’re not going to look at it, well, wait a minute, you only spend $35,000 on this player. That that’s just not how people think. And if they see you taking an active interest in their community, I think your existing tenants kind of appreciate that because they see that as an opportunity to get

They’re like, okay, great, there’s more people here now. And this is a brand new home. Now suddenly it’s just like any other subdivision where if Scott’s living in his house and it’s the nicest house in the neighborhood, there’s a little bit of a why am I here? This I don’t like this so much. When if suddenly all those homes get rehabbed and now you’re living and your house is not the nicest one, well, maybe you’re gonna paint your siding, maybe you’re gonna clean up your yard, maybe you’re gonna fix your deck. That same phenomenon exists, this fun this notion of co-investment in the community, that

difference between any other multifamily product, which is the tenants own the homes. They will invest in their homes if they see you investing in the community. It’s this amazing dynamic that can exist if cultivated and fostered the right way. But again, that doesn’t exist in a two or three year turnaround. You have to give it time.

Scott Bursey (15:25)

I guess the big question here, Andrew, is how quickly do you think the traditional real estate sector will catch on to this shift?

Andrew Cramer (16:15)

the institutional interest has definitely gone way up. There are major institutions that have been buying manufactured housing for better part of 10 years. And they’re as they show up, everybody kind of has to adjust. So if you’ve got a big buyer that kind of has its own capital, doesn’t need to worry about debt, they can structure all that themselves. The rest of us can’t really compete for those very, high-end properties.

Two things. There’s a geographic dispersal from institutional buyers showing up where your regional operators are looking to other places that might be off the institutional radar. So these tend to be, they’re gonna be lower, smaller population areas, usually some going out to other states. so there’s a lot of interest like in the Midwest and the Southeast for that reason. I also think that you tend to see a shift in financing, which is positive because now we’re

I kind of mentioned how we like to upgrade these communities so there’s better financing available. That’s changed because now what used to be no bank would touch it, your regional operators have had to adjust their lending standards kind of to accommodate more of a wider pool because they have to put dollars to work. And then you see it across the board where even the agency lenders who are whose mandate is affordable housing, their s they their standards have gone from a very, tight standard on what they would lend on to a much more

diverse standard of product that they’ll lend on. So all this creates opportunities it could because it opens up the field. So I think the institutional buyer, I won’t say they’re universally good, but their influence on the market can be positive because they w when they go away,

There’s not really a top of the mountain that we can all kind of look at and understand that institutional investors do a great job of sort of quantifying the top end of the market. so that to me is a very positive influence. that’s how the dynamic has shifted since I’ve been doing this.

Scott Bursey (17:54)

Thank you for sharing that value. And Andrew, if you could walk us down the path of what does your professional network look like right now?

Andrew Cramer (18:02)

I work a lot with there are some great specialty brokers who deal in this region in this product type. and they’ve gotten better over time. and I think broker commercial brokers get a bad reputation, sometimes deserved. there are guys who I genuinely trust who understand

what I’m what my capabilities are. And they represent me really well to sellers it’s an interesting product type because unlike big giant apartment complexes where it’s sort of trading from one institution to the other, we still see a lot of individual owners, maybe, their parents passed away, they’ve inherited this property that they just don’t want anything to do with. that’s a seller that needs a lot of education and assistance.

I have colleagues. it’s great to have people that sort of are in the same boat you are. So it’s always I always enjoy talking to those guys. we’ve got great investors. And I think the investors that we have are people that

share our vision to a certain extent. They want to see affordable housing. They but they also understand the tremendous amount of value that these properties can provide both to an investor, both from a return on investment, but also phenomenal tax advantages with the continuation of bonus depreciation. Manufactured home parts occupy this very unique and this is something for all of us to talk to our accountants about obviously, but they have a very unique structure that allows them pretty unique treatment.

There’s nothing better to me than an individual wanting to make a private placement investment and getting to talk to them and understand what their hopes and goals are. We, you we have some larger investors and family offices and they’re great too. earlier this year, I had a I had an investor fly to central Washington and it was a couple, they lived in Maryland, and they spent the day with me touring. They made an investment, which was, I think, their first private real estate investment, as this is just their family’s money.

And I got to spend the afternoon with them. And they felt sort of when we first met, they’re like, I can’t believe this guy actually showed up to spend time with us. But I loved it. it was great to see them and see their interest in their in this property. They got to drive the property that they, have an investment in. I get a lot of satisfaction in seeing that too. People who are realizing that you don’t just have to put your money into

mutual fund you can actually invest in something that’s gonna make a difference and you can generate a great return it can all exist in the in one thing you can have great returns you can build a great community and everybody can win in this asset class if you do it right we always think about how can we do that how can we structure this so that the residents in these communities win

That our company and our employees and our team get to benefit from this and our investors also get to benefit from it. And it works. We’ve made that work many times.

Scott Bursey (20:27)

Excellent insight right there. Andrew, if an investor wants to allocate capital into tech focused manufacture housing today to achieve high yields and true community impact, what is the most critical decision they must get right from day one?

Andrew Cramer (20:45)

if we’re talking about sort of the manufactured housing technology side, I’ll give you two answers. So if you want to make an investment in one of these new housing companies, I would strongly advise you to go and look at the product and make sure that they can legally put that product somewhere. Because I’ve seen I’ve toured a dozen new housing technology kind of places, and really none of them have an ability to legally place that.

on a lot and call it a sub and call it a domicile. it sounds simple, but it they they’re just not going through that regulatory step. that’s getting better. I think these guys are doing a better job of that. But I think from a technology standpoint, worth the plane flight to go to their factory. It’s worth the trip to go and look at what like is someone living in one of these things, not just sitting in a pretty showroom. Is someone actually living in one of these and what’s their experience been?

I think particularly when you’re looking at like the very, small homes, tiny homes, all of that, you got to make sure that these things are actually livable. on the community investment side, really same thing. Like just make sure that whoever you’re putting money with, make sure that they

Understand this product type and make sure that they’re not just looking at this from a numeric standpoint saying, like, hey, the St. Louis market has this and the market rents are this, and we’re buying this property, it’s 40% vacant, and we’ll just have these three dealers bring homes into our park. Like anything that sounds like they just did a lot of like superficial research, I would be very cautious of. You want to know people that are saying things like.

Yeah, when we drove this park, when we got in and we walked through this vacant unit, and when we called this framer and this excavator, you want in my opinion, you want people who at least have it even if it’s not them directly, who at least have a direct connection to what’s going on and don’t talk about things in like an MSA level.

give me the three block radius of where that block of where that property is. Tell me about that. Tell me about why you like this market. Not get don’t give me the chat GPT version. so I’d say like same thing. Just really, make sure that the people you are going to trust your investment with are deeply in involved and understand what this product is and how they’re gonna how they’re gonna make it better. Don’t too if it’s too many third parties, I would be I would be concerned.

Scott Bursey (22:48)

Thank you for dropping that deep dive wisdom. And Andrew, you have dropped a lot of wisdom bombs here today. But is there any additional words of advice that you like to leave with our listeners?

Andrew Cramer (23:00)

I would just say the most important thing, the biggest call to action for me is just look at this product, look at manufactured housing in a little bit of a different light. And don’t look at it from that, I guess it’s a trailer, maybe I’ll go look. Really just, go on just go on the one of the websites, go on the Cavco or the Clayton Homes website.

look at some of these new technologies that are being put out, and you’ll really start to see that these are pretty interesting products. I’ll always happy, love having these conversations if anyone’s curious, but I think that would be the biggest thing. Just if a few people start to shift that perception, kind of like I’ve been saying this whole time, that is the most important thing we can do. I really genuinely believe that. if that stigma starts to go away and get deconstructed,

We’re going to start to see tremendous progress, not only for manufactured housing, but for affordable housing. This should be in terms of affordable home ownership, nothing even comes close to this. So the fact that it’s not really part of the conversation right now, and there’s not really, there’s not like HUD projects being built that are all of our all manufactured housing. There’s not Section 8 projects being built that are all manufacturing that there should be.

And I really think that if we can just start to deconstruct that stigma, we’re gonna start to see it roll out and we’re gonna start to see home ownership. We’re not just gonna start to see sort of, affordable home that people get kind of stuck in forever. The manufactured homes facilitate wealth building. so I think that’s kind of the biggest thing is like let’s work that stigma first. So anybody listening, that would be my that would be my biggest ask.

Scott Bursey (24:24)

Thank you for that. And Andrew, for those of our listeners that want to keep this conversation moving, stay in your lane or collaborate with you on future deals, what is the best way for them to plug into your pipeline and reach you directly?

Andrew Cramer (24:37)

I’ve written extensively on most of what we’ve talked about. So if you just it’s on LinkedIn is probably the easiest way to reach all that information. our website, Bridgeviewassetmanagement.com, has all that information as well. I try and kind of keep up keep abreast of all the comments that come through on both of those channels. But yeah, Andrew Cramer on LinkedIn and Bridgeview Assetmanagement.com are probably the two best places.

Scott Bursey (24:59)

Andrew, thank you so much for joining us today on the Real Estate Pros podcast.

Andrew Cramer (25:03)

Thank you, Scott. It was great being here.

Scott Bursey (25:05)

This has been an absolute master class. And to our listeners, we appreciate you. If you receive value from today’s episode, please subscribe. We’ll be fueling your tanks with a lineup of elite guests, just like Andrew Cramer who are accelerating and setting the pace for the rest of the industry. Until next time, keep your standards high and your vision clear. We’ll see you in the next episode, everyone.